Thursday, June 8, 2017

Last week, President Trump withdrew from the Paris Agreement. You can read the original text here, but essentially, the Paris Agreement is an international agreement that has the goal of making sure that by the end of the century, the global temperatures do not rise 2˚C above pre-industrial revolution temperatures. The two-degree mark is important because many climate scientists believe it is the threshold our planet can handle without climate change destroying the world. Think of it as analogous to a speed limit, but for climate change. As long as we don't go over, we can avoid drastic shifts in weather or food and water crises.

The United States' intended goal when initially signing the Paris Agreement back in 2015 was to reduce emissions by 28 percent of the 2005 levels by the year 2025. To arrive at the goal, the Obama administration pledged to enact various regulations on oil and gas activities, vehicles, residential buildings, and other facets of our life. We'll touch upon that concept in a moment, but let's just say that what Obama pledged was much more aggressive than what his counterparts pledged.

Based on what I have heard about the Agreement, Trump's withdrawal from the Agreement sounded so catastrophic. German Chancellor Angela Merkel thought Trump's decision was extremely regrettable, and French President Emmanuel Macron called it "a mistake both for the U.S. and our planet." John Oliver's bit (see below) made it seem as if Trump single-handedly precipitated the beginning of the end of the world. Did Trump's indifference on climate change really doom us all? Will Trump's decision cause harm or does it ultimately not matter?

I don't want to get into how the politics of the Green United Fund, how the United States made an overly aggressive pledge while the EU made modest ones in comparison, or how the United States was never technically or legally bound to the Paris Agreement since ratification did not go through the legislative branch. I don't even want to get into the politics of climate change right now. I want to get into whether the costs are worth the benefits, and whether the Paris Agreement would stop the horrors of climate change. The burden of proof (see below) as to whether the Paris Agreement is good policy is on proponents proposing it, not the skeptic.

Speaking of skepticism, there have been points where I have expressed "climate change denial,"which later evolved into skepticism. I have reached the point where I have acknowledged that man has contributed to climate change. At the same time, the skepticism comes in when people around me express such confidence in tenuous climate models that try to project effects a century out.

Even with my skepticism, I still think something needs to be done. Why? The best argument I have come across is that of risk management. In the private sector, what do you do when you have a non-diversifiable, low-probability, high-risk scenario is hedge against that risk. Climate change is no different here. At the same time, identifying manmade climate change as a problem does not automatically necessitate a specific solution. You can hold the opinion that manmade global warming is a problem that needs to be solved now and still think the Paris Agreement is a bad idea, which is what I am going to argue now.

The Right-leaning Heritage Foundation released a study on the impacts of the Paris Agreement back in 2016. The study found that by 2035, there would be 400,000 American jobs lost, $2.5 trillion lost in GDP, a total income loss of $20,000 for a family of four, and household energy expenditures to increase by 13 to 20 percent. And that is just the cost to the American economy! If that is the cost it imposes on the United States, imagine the costs it would impose on developing countries, the ones that already deal with energy poverty. And for that cost, the Heritage study estimated that the Paris Agreement would reduce global warming by less than two-tenths of a degree Celsius. A March 2017 report from NERA Economic Consulting comes with similar results.

And if the Heritage Foundation is not an adequate source for you to illustrate how ineffective the Paris Agreement would be, how about the Massachusetts Institute of Technology (MIT)? The MIT Joint Project on the Science and Policy of Global Change projected that even if every country succeeded on its pledges made back in 2015, the Paris Agreement would avoid a measly 0.2˚C of warming (also see Lomborg, 2015), which is only a fraction of what would be needed to avoid global warming catastrophe. In the November 2016 issue of Global Environment Change (Vandyck et al., 2016),a group of European climate change scientists researched the effect the Paris Agreement had, and concluded that the even with the Agreement, the global temperature would most probably be 3˚C, which is above what is desirable.

And if those studies were not enough, look at the estimations from the United Nations itself. Since this Agreement is through the UN, they are the ones who are going to be the most optimistic and Pollyannish about the Agreement. Even if all the countries are able to make their pledges for the Agreement (which is tenuous to begin with), the United Nations estimates that it would most probably range between 3 and 4˚C. And these are the figures from those advocating for the Agreement assuming that all the countries will meet their pledged goals.

A final point to consider is whether the 2˚C target can is feasible. To make that goal, the world would need to reduce oil reserves by a third, gas reserves by half, and coal reserves by 80 percent (McGlade and Eckins, 2015). With an increase of global demand for energy consumption, good luck with that!

Trump's decision is not the end of the world as we know it, and I'm actually glad to see Trump pull out of this bad deal. Just because we "need to do something now" doesn't mean we should do anything. That's the mentality that allowed Obamacare to reek havoc on the United States health care system. If there is to be a policy alternative, it needs to be better than the status quo, and those arguing the case for the Paris Agreement simply have not met the burden of proof to implement it in good conscience. I would be much more inclined towards a revenue-neutral carbon tax than the Paris Agreement, although technological subsidies would be even better. We saw how carbon emissions dropped as a result of fracking, and further innovation and positive market shifts will solve the issue more suitably than the Paris Agreement. Heavy-handed, command-and-control regulation like we see in the Paris Agreement wasn't going to solve climate change. When all is said and done, the solution needs to focus on technological innovation. If we can focus more on the technological piece instead of regulations with high economic costs and nearly non-existent environmental benefits, then we could actually make headway on climate change.

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